Zomato Gold and way forward

Indian market is evolving with the adoption of technology over the last few years by new sectors. One such sector being food and beverage where several new companies have emerged which facilitates online food delivery and promotion of dining out in restaurants. Zomato, one of the companies in this segment introduced the ‘Zomato Gold’ feature which was primarily aimed at increasing footfall and the brand image of restaurants. It was adopted aggressively by restaurants all over the country. However, recently restaurants are pulling out if it citing various reasons. Some of their concerns being Zomato gold’s failure to increase the footfall or revenue in any significant manner, extending the feature to food delivery with deep discounts and above all, the issue of the dilution and replication of brand value. Restaurants allege that deep discounting gives rise to an unhealthy ecosystem that is not sustainable in the long run. On top of it, their brand has been used by other restaurants to package and sell items.

Companies like Zomato, Swiggy, UbeEats etc give a medium to local restaurants to compete with big restaurants and reach for customers outside their immediate influence. It is like a platform of online marketing for any restaurant registered under it. Restaurants can introduce new dishes and advertise the same to their customers via such a platform. The presence of a feedback mechanism that is otherwise missing in offline restaurants is a huge opportunity for the sellers to understand customer behavior and preferences. These platforms are multi-purpose and will surely enhance the way businesses are done in the future. The greatest advantage being, the online food market is still not mature which gives it a window for innovation for better services.

Programs like Zomato gold can be very effective for both restaurants and companies if efforts are taken to mitigate the risk and challenges involved in it. Restaurant unions and companies should work together to address the problem of brand dilution by bringing in rules and strict measures to counter abusive players. Discounts and other benefits should be implemented after careful deliberation among stakeholders. Dining out should be encouraged in customers which helps in increasing footfall and building of brand value. An online portal should be created where both the stakeholders can continuously engage and resolve their issues on priority. The government should also bring in new legislation for the effective implementation of emerging technologies since they have the potential to generate employment in huge numbers.